PHILADELPHIA, May 22, 2020 /PRNewswire/ -- Berger Montague is continuing to investigate securities fraud claims against iQIYI, Inc. ("iQIYI" or the "Company") on behalf of all purchasers of iQIYI securities, including American Depositary Shares ("ADSs") (NASDAQ: IQ), between March 29, 2018 and April 7, 2020 (the "Class Period"). After Wolfpack Research issued an extensive, highly-detailed, 37-page report accusing the Company of overstating its revenue and user numbers, iQIYI has responded with a brief statement that the report contains "numerous errors, unsubstantiated statements, and misleading conclusions," but to date has not provided any specific refutation of the allegations in the report.
If you purchased iQIYI securities, have information, would like to discuss this investigation, or have any questions concerning your rights or interests, please contact our attorneys Andrew Abramowitz, Esq. at (215) 875-3015 or Donnell Much at (215) 875-4667, or visit www.bergermontague.com/iqiyi-second-update.
iQIYI, headquartered in Beijing and referred to as the "Netflix of China," operates a Chinese online streaming platform with on-demand video content. The Company generates its revenue primarily from membership services and online advertising. According to the lawsuit, the Company and its senior management falsely portrayed key financial metrics. For example, it allegedly overstated 2019 revenue and user numbers and inflated expenses to conceal its false revenue and usership.
The true state of the Company's financial picture was revealed on April 7, 2020, when Wolfpack Research released a report alleging that iQIYI had misled investors in its public statements, including in the offering materials for its initial public offering. The report stated that iQIYI had overstated its user numbers and inflated its revenues, and that to disguise that deception, iQIYI had inflated expenses and the price of assets. Significantly, the report stated that: "Our research shows us that [the Company] was committing fraud well before its IPO in 2018 and has continued to do so ever since…We estimate IQ inflated its 2019 revenue by approximately RMB 8-13 billion, or 27%-44%. IQ does this by overstating its user numbers by approximately 42%-60%."
On this news, the price of iQIYI ADSs fell $0.79, or approx. 5%, to close at $16.51 per share on April 8, 2020.
If you purchased iQIYI securities, including ADSs, during the Class Period, you may seek Court appointment as lead plaintiff to represent other injured investors in a class action. The lead plaintiff appointment deadline is June 15, 2020. You do not need to be a lead plaintiff to share in any potential Class recovery.
Whistleblowers: Persons with non-public information regarding iQIYI, Inc. should consider their options to help Berger Montague's investigation or take advantage of the SEC Whistleblower program. Under this program, whistleblowers who provide original information may receive rewards totaling up to thirty percent (30%) of successful recoveries obtained by the SEC. For more information, contact us.
Berger Montague, with offices in Philadelphia, Minneapolis, Washington, D.C., and San Diego, has been a pioneer in securities class action litigation since its founding in 1970. Berger Montague has represented individual and institutional investors for five decades and serves as lead counsel in courts throughout the United States.
Andrew Abramowitz, Senior Counsel
Donnell Much, Associate
SOURCE Berger Montague